Still, gambling on this technical thesis is a huge risk ahead of the company’s Q3 report, expected on Oct. Personally, I’m leery of shorting PINS stock because the equity unit’s performance this year could represent a consolidation pattern that eventually results in an upward swing. That’s not to say that shares can’t bounce higher. If the fading of the pandemic is pressuring MAUs, then Pinterest won’t be able to reasonably depend on a repeat revenue performance.Įventually, that would crimp profitability potential, which is why so many have abandoned ship on PINS stock. Yes, the sales haul of $613 million is awesome but it only resulted in a net income of $69 million. Meaning that if we do indeed encounter a negative inflection point in MAUs, investors might not be able to depend on such impressive sales growth metrics in future quarters.Īnd if Pinterest can’t deliver the goods on the top line, then it seems the bottom line is guaranteed to suffer. However, the challenge for prospective buyers of PINS stock is that the market doesn’t move on past information. Now, Navellier is absolutely correct in noting the dramatic revenue growth in Q2. It certainly looks like this might be an inflection point - one that potentially moves in the negative direction in Q3 and beyond. If they did the latter exercise, they might appreciate why the bears are so concerned. So I think those who are bullish on PINS stock are focusing a bit too much on the YoY comparison and not on the bigger picture. However, this was a terrible performance compared to the prior 17 quarters, which averaged 44%. On the international front, MAUs for Q2 2021 saw 13% growth YoY. Between Q1 2017 through Q1 2021, domestic MAU growth averaged 9.2%. Worse yet, this was the first time since at least Q1 2016 where growth in either the domestic or international segment fell into negative territory. While MAUs were up on a YoY basis, domestic growth was a laggard, down 5.2%. It all sounds great for PINS stock but the broader data is worrisome. Moving forward, Pinterest is using the free organic marketing opportunity - the hostage audience catalyst, if you will - of the pandemic to bolster the platform from a place to browse to a vibrant community of people sharing their passions and expertise. For Q2 2021, the company grew global revenues by an astounding 125% year-on-year to $613 million,” stated my InvestorPlace colleague. “Moreover, while MAUs are the lifeblood of a social media platform, revenue generation is also important. For one thing, on a combined domestic-and-international basis, MAUs increased by nearly 9% to 454 million. When assessing the Q2 results from a year-over-year framework, it’s difficult not to get excited about PINS stock. So, is it time to trust Pinterest? MAU Fallout Is a Problem for PINS Stock Rather, it leaves the door open to a positive surprise in the upcoming quarter.” However, Navellier retorted that, “Pinterest, however, has evidently chosen to be honest and admit that it isn’t prepared to provide MAU guidance right now. Usually, investors read between the lines when a company fails to provide guidance and that’s what happened with PINS stock. Management stated that it couldn’t provide a forecast for monthly active users due to “lack of visibility into certain key drivers of engagement.” It’s not that the Q2 numbers were underwhelming but rather the guidance for Q3 was a no-show. I’ll let you read the details of his arguments but in short, Navellier believes that the extreme pessimism toward Pinterest’s less-than-convincing second quarter of 2021 earnings report is unjustified.
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |